The Defence department will need to find more than $270 million in savings over the next four years as part of the Albanese government’s extended purge of contractors and consultants.
Ahead of the federal Budget earlier this month, the government revealed it would shave a further $1 billion off its external labour spend, bringing total savings to $4 billion by 2027-28.
More than half of the new savings ($625 million) will be recovered directly from agencies in 2027-28, while an “external labour levy” will be used to source the remaining $375 million from 2024-25.
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Defence apparently equates to approximately 50% of the whole of government expenditure on consultancies. Some are high profile like KMPG, but there is plenty of non-tech engagements like property management. I think, happy to be corrected, that Defence also avoided the original round of cuts due to sensitives around their critical role. Interesting to see Environment in the mix, as a new department it may have been hard for the powers that be to determine what level of savings they wanted to see (limited historical data). I think they also avoided the first round of cuts as a result.
It would be good to see the Government own this change a bit more, with replacement funding for the APS roles, rather than just cuts. Hard to hire APS to replace contractors/consultants if all you have to work with are mandatory funding cuts.